Centro wants ‘consensual’ restructure

Debt-laden shopping centre owner Centro Properties Group says its board isn't considering a liquidation of the group in order to restructure its assets.

Chief executive Robert Tsenin says the board is still focused on achieving a "consensual" restructuring of the group involving the sale of US assets, and holders of Centro's debt making available $100 million to Centro stakeholders and securityholders.

But Mr Tsenin said Centro's lenders always had the ability to consider alternatives such as liquidation.

"What actually happens, we'll have to see, but that's not the basis of the negotiations to date," he told reporters on Friday.

"It's not something that we as a company are considering because we want to get a consensual outcome.

"Whether the lender group at some point or other, which is their prerogative, decides to adopt a different approach, that's for them."

Mr Tsenin was speaking after addressing an American Chamber of Commerce in Australia luncheon.

Centro Properties announced in March that it would sell its US assets and, under an arrangement with its senior creditors, exchange its Australian assets in order to cancel its debt.

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Centro and its managed funds will sell the US portfolio of about 600 shopping centres to BRE Retail Holdings Inc, an affiliate of Blackstone Real Estate Partners, for $US9.4 billion ($A9.24 billion).

Under arrangements negotiated between Centro and its senior lenders, $100 million will be made available for securityholders and other stakeholders who are junior to the senior lenders after the US sale closes, and if other restructuring measures are approved by securityholders and other stakeholders.

Centro had also said it was in talks with senior lenders, the Centro Retail Trust, and other Australian managed funds with a view to amalgamating their respective portfolios to create a listed fund owning a retail property portfolio of Australian shopping centres.

Mr Tsenin said it was unclear how much of the $100 million would go to Centro securityholders.

"That is an ambiguity, I have to admit that," he said.

"We have not at this stage agreed a formula as to how that would be distributed.

"We're having discussions with various parties (lender groups and other stakeholders) on that."

Mr Tsenin said the restructure of Centro involved many stakeholders and was complex, so it was hard to provide a specific date on an outcome.

"But, I think some time this calendar year," he said.

Mr Tsenin said Centro was working on the presumption that the restructure laid out in March will happen.

"All the indications in our negotiations with our senior lenders is that they are supportive of a consensual restructure," he said.

"We also think that a consensual restructuring along the lines that we've talked about, which is amalgamating the funds and creating a single listed entity, is the right outcome for our investors across the group."